Where to stay in Madeira
Madeira is small, but its steep terrain makes journeys slower than distances suggest. Most visitors stay on the sunnier south coast, especially in or near Funchal, and explore the island by car or tour.
Funchal city centre and the Old Town (Zona Velha)
Staying in central Funchal puts you close to the cathedral, the Mercado dos Lavradores, the marina and the cable car to Monte. The Old Town along Rua de Santa Maria is famous for its painted doors art project and restaurants. Hotels, guesthouses and apartments are abundant. It's ideal for those without a car.
Lido and the Hotel Zone
West of the centre, the Lido area has many large resort hotels with pools, sea views and a promenade along the coast. It's popular with couples and families, and the Lido pool complex offers sea swimming. Buses connect to the centre in 10 to 15 minutes.
Garajau and Caniço
East of Funchal, Caniço and Caniço de Baixo are quieter resort areas with apartments and hotels, close to the Garajau Marine Nature Reserve, popular for diving and snorkelling, and the Cristo Rei statue. They're convenient for the airport.
Calheta
On the south-west coast, Calheta has one of Madeira's few golden sand beaches (imported sand), a marina and the Mudas Contemporary Art Museum. It's sunny and peaceful, with good access to levada walks in Rabaçal.
Ponta do Sol and Madalena do Mar
These small villages in the south-west are known for sunshine and banana plantations. Ponta do Sol launched a digital nomad village initiative in 2021, attracting remote workers. Expect a relaxed vibe and lovely sunsets.
Machico
Machico, in the east, is where the first Portuguese settlers landed. It has a golden sand beach and a historic centre, and is near the airport and the Ponta de São Lourenço peninsula. It's a good, cheaper base.
Porto Moniz and São Vicente
On the north coast, Porto Moniz is famous for its natural lava rock pools filled by the sea. The north is greener and more rugged, with cooler weather. Staying here suits hikers who want quiet nights.
Santana and rural Madeira
Santana is known for its traditional triangular thatched houses. Rural guesthouses in the mountains offer access to hiking trails and the Laurisilva.
Booking notes
Madeira is popular year-round, but busiest at Christmas and New Year (when Funchal's fireworks have set Guinness records), Easter, the Flower Festival in spring and summer. Since 1 October 2024 the municipality of Funchal has charged a tourist tax of €2 per person per night, for a maximum of seven consecutive nights, for guests over 12 who are not Madeira residents. Stays outside Funchal are not covered by this municipal tax. Many hotels are on hillsides, so check walking distances to town.
Câmara de Lobos
Just west of Funchal, Câmara de Lobos is a fishing town with a small harbour full of brightly painted boats. Winston Churchill painted the bay in 1950, and a viewpoint marks the spot. It is the home of poncha, which you can try in tiny bars around the square, and it sits at the foot of Cabo Girão. Accommodation is cheaper than in Funchal, and buses run into the capital in about 20 minutes.
Monte and the hills above Funchal
Monte, around 550 metres above the sea, was a fashionable retreat for wealthy families in the nineteenth century, and quintas (manor houses set in gardens) still dot the slopes. Staying here means cooler air, quiet nights and sweeping views over the bay, with the cable car to the seafront below. The steep roads make a car or taxi useful.
Quintas and manor-house hotels
One of Madeira's most distinctive ways to stay is in a quinta. Many were built by British wine merchants and have been turned into hotels with mature gardens of camellias, palms and jacarandas. They are spread through Funchal's upper districts and suit travellers who want character over a large resort.
Choosing a base for hiking
If walking is the priority, think about the trailheads. Rabaçal and the 25 Fontes area are easiest from Calheta and the Paul da Serra plateau; Caldeirão Verde starts at Queimadas near Santana; Pico do Arieiro is about 45 minutes from Funchal by car. Splitting a week between Funchal and a few nights in the north or west saves a lot of driving on steep roads.
Hillsides and access
Many Madeira hotels are on slopes, and some streets in Funchal reach gradients that are hard work on foot. Ask whether the hotel runs a shuttle to the centre, check the altitude of the property (higher often means more cloud), and look at whether parking is included if you rent a car.
Summary
No car and city life: Funchal centre. Resort pools: Lido. Diving: Caniço. Sun and beach: Calheta. Remote work: Ponta do Sol. Airport and budget: Machico. Natural pools and hiking: Porto Moniz.
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